Patience and the Art of Investing - Page 2
Sadly, today it is harder than ever to encourage patience in consumption. Why should anyone wait to get something they want if cheap (and frequently not-so-cheap) credit is offered by almost every retail outle? "No money down and 2 years' free credit" is all-too familiar - and enticing! Kids are offered credit cards on the basis of little or no income or savings.
Older people remember when it was different - if you wanted something, you saved for it. Strangely, having the discipline (or patience) to delay a purchase (say, by a week) seems to make the 'object of desire' a lot less attractive - there is something emotional about the act of purchase that destabilises our other - more sensible - instincts.
Debt is the antithesis of patience - with the exception of debt taken on for really big purchases, such as a mortgage for a house or, possibly, a loan for an automobile (although I paid cash for my last two vehicles).
And the curse of debt is the interest payment, which can easily balloon out of control and crush the spirit of any individual or family. Once sunk in debt people start to lose hope of ever re-surfacing financially. But, of course they can - if they re-learn the art of 'patient consumption'.
Assuming you have debt under control (which means no debt, as far as I am concerned) you can turn you attention to growing your wealth. The key is simple - spend less than you earn; in other words, continued to practice patience in consumption. Some people (and families) can be so adept at this that they can live on less than half their income.
Once you are generating spare cash, and have an emergency fund to cover unexpected expenses, you can begin to invest in asset classes that will increase your wealth over the medium to long term. And in investing patience is also a key virtue; you are not investing for the short term and (by now) you will have realized that you are unlikely to 'get rich quick'.Continued on the next page